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Tuesday 22 January 2019


Spring Conference

MiFID II to encourage greater low cost passive fund usage supporting ETF growth

Written by Adam Cadle

The added cost transparency and ban on commissions for independent financial advisers as a result of today’s MiFID II implementation will encourage greater use of low cost passive funds among retail clients, supporting the growth of ETFs, according to Moody’s vice president and senior analyst Marina Cremonese.

“Additionally, as ETF trades will have to be reported, there will be more information about ETF trading volumes and liquidity. The resulting improvement in transparency and liquidity will likely prompt a larger usage of ETFs for securities lending and collateral purposes from institutional investors,” she said.

Cremonese said the introduction of MiFID II will bring widespread change to how asset management products are designed and sold.

DLA Piper partner and head of financial services regulation Michael McKee said: “MIFID II is more of a whimper than a bang.

“While it is one of the most important pieces of EU legislation for securities markets in years, the reality is that on implementation day, 3rd January 2018, many member states will not have implemented it and consequently it will still be some time before these major market changes hit home.”

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